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How Customers evaluate your product

If you sell to B2B customers then you know hard it is to get that purchase order. Even for pay as you go SaaS products there can be a lengthy evaluation process before you get in the door.

It goes without saying that it helps to put yourself in the shoes of your prospective customer to try and see how they perceive your company and product. What would their concerns be? How would they go about evaluating this opportunity?

I recently introduced a portfolio company’s product to a large, established prospect. They quickly came back with a short and insightful analysis based on the questions below. They answered these questions for themselves. I thought it was a great framework for thinking about how customers think about a startup’s product.

What does it do?

· This question describes in plain language (not marketing speak) the purpose of the product.

What problem does it solve?

This question looks for bullet lists of benefits from the point of view of the customer. These should tie into product features

How important are those problems today?

· This question asks for a ranking of the above problem solutions relative to internal priorities

What KPIs might it impact?

· All great companies are data driven. If a company is to adopt something new there must be a clear, measurable benefit hitting an important key performance indicator (KPI)

How might we solve this problem ourselves?

· Classic build vs. buy analysis.

Does this “fit” with us?

· This question considers the solution’s functionality from the point of view the impact on a company’s brand and its own product or service.

What important questions/unknowns exist?

It is a given that if a company is evaluating a startup’s offering then many unknowns exist. These could be whether that startup has enough cash, existing customers, ability to provide adequate support, etc.

As a B2B startup with a SaaS distribution model, I can assure you that we see these questions every time. Fortunately, we are getting better at answering them with each new prospects and sales are improving nicely.
However, the sale cycle is still too long for us. As we are conducting a full day meeting next Thursday to see how we can reduce that cycle, would you have any lesson learns or tools to use that would help us tackle this critical issues? Thanks.

Pete

http://startupcfo.ca Mark MacLeod

Pete,

One of our enterprise Saas companies had a lot of success adopting consumer SaaS principles including :
Stripped down entry version of the product making it faster, cheaper and easier for customers to start seeing the value you bring. One even went so far as to make a free version.

You need to get to the root cause of the delays. In my experience there are three sources: fear that you can't deliver the promised features. Fear that you can't fully support big customers. Fear that you will run out if money. Transparency is the answer here. Share your documented support practices. ( in fact no SaaS company can succeed without customer support being a top priority). Let customers try the features. Give them access to your top tech staff. Include customers in an advisory board on product roadmap. And don't hesitate to show who you are funded by to give customers comfort about your financial health.

Really understand your process. Look at your best (shortest) sales cycles for leanings and best practices:
What industries, budget levels, champion titles and other attributes are common amongst your shortest cycles?

Consider offering some sort of guarantee. Stand behind your product and service offerings.

There's no magic bullet but by understanding your customer, your sales process and by removing fear and obstacles you can massively compress sales cycles.

http://twitter.com/p_lalancette @p_lalancette

Thanks again Mark,

We had our meeting last Thursday and, I guess it is a good thing, we came up with the same answer (i.e. Stripped down entry version…) Our recent experience showed us that prospect who were given a free "already configured for their needs demo", were faster to hope in. So, we are going to streamline this process and see what kind of reactions we get.

As for financial backup, we are bootstrapping this owl thing up. For some prospect, you are right, it does scare them a bit. For others, they are amaze and see this more as a strong point. It's all perception.

One thing is for sure however, quality of service is number one and that we don't compromise.

I'll let you know how our new approach turns out.

PaulSullivan

Mark, good list. A few others to expect:

* What proof do you have that your product will work for our situation?

* How can I justify the decision (cost/value, time, risk…)?

* What are your terms? Where do I sign? – If you get to these questions, be sure to smile!